Spml Infra reports 35.4% EBITDA growth and almost no change in EBITDA Margin of 9.9%

29-05-2015 • About Spml Infra ($SPMLINFRA) • By InTwits

Spml Infra reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Spml Infra has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.5%. At the same time it's in pair with industry average of 12.1%.
CAPEX is quite volatile: 200 in FY2015, 1,775 in FY2014, 1,748 in FY2013, 974 in FY2012, 681 in FY2011
The company has business model with average profitability: ROIC is at 10.6%
It operates with medium-size leverage: Net Debt/EBITDA is 4.4x while industry average is 4.8x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Spml Infra ($SPMLINFRA) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	12,821	10,625	12,673	13,512	18,238	35.0%
EBITDA	1,067	1,389	1,611	1,339	1,813	35.4%
Net Income	195	79	54	-125	9
Balance Sheet
Cash	596	557	511	372	443	19.2%
Short Term Debt	4,325	5,088	4,431	6,257	6,528	4.3%
Long Term Debt	2,975	2,606	3,912	3,929	1,887	-52.0%
Cash flow
Capex	681	974	1,748	1,775	200	-88.7%
Ratios
Revenue growth	-43.9%	-17.1%	19.3%	6.6%	35.0%
EBITDA growth	-45.1%	30.2%	16.0%	-16.9%	35.4%
EBITDA Margin	8.3%	13.1%	12.7%	9.9%	9.9%	0.0%
Net Income Margin	1.5%	0.7%	0.4%	-0.9%	0.1%	1.0%
CAPEX, % of revenue	5.3%	9.2%	13.8%	13.1%	1.1%	-12.0%
ROIC	6.7%	8.6%	9.7%	7.1%	10.6%	3.4%
ROE	4.3%	1.7%	1.2%	-2.7%	0.2%	2.9%
Net Debt/EBITDA	6.3x	5.1x	4.9x	7.3x	4.4x	-2.9x

Revenue and profitability

The company's Revenue surged on 35.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 10.2% to 11.9% in FY2015.

Net Income marign increased slightly on 0.98 pp from -0.92% to 0.052% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Spml Infra had CAPEX/Revenue of 1.1%. CAPEX/Revenue decreased on 8.1 pp from 9.2% in FY2012 to 1.1% in FY2015. Average CAPEX/Revenue for the last three years was 9.3%.

Return on investment

The company operates at low ROIC (10.56%) and ROE (0.20%). ROIC increased on 3.4 pp from 7.1% to 10.6% in FY2015. ROE increased on 2.9 pp from -2.7% to 0.20% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.4x and Debt / EBITDA is 4.6x. Net Debt / EBITDA dropped on 2.9x from 7.3x to 4.4x in FY2015. Debt dropped on 17.4% in FY2015 while cash surged on 19.2% in FY2015.

Valuation

The company's trades at EV/EBITDA 5.8x and P/E 274.4x while industy averages are 10.5x and 26.1x. Spml Infra's EV/(EBITDA-CAPEX) is 6.6x with the industry average at 4.7x.

Appendix 1: Peers in Construction & Engineering

Below we provide Spml Infra benchmarking against other companies in Construction & Engineering industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Madhucon Projects ($MADHUCON)	-72.3%	-19.5%	61.7%	81.2%
C & C Constructions ($CANDC)	7.1%	-11.6%	-12.2%	31.7%
Mbl Infrastructures ($MBLINFRA)		26.3%	7.1%	30.3%	11.1%
Atlanta ($ATLANTA)		-47.6%	115.1%	28.1%	50.2%
Arss Infrastructure Projects ($ARSSINFRA)		-5.3%	-34.8%	17.8%	-27.8%
Median (31 companies)	-14.9%	11.4%	6.6%	7.1%	7.1%
Spml Infra ($SPMLINFRA)		-17.1%	19.3%	6.6%	35.0%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jaiprakash Associates ($JPASSOCIAT)	44.0%	36.9%	35.9%	32.4%
Atlanta ($ATLANTA)	44.1%	28.5%	34.6%	30.8%	21.4%
Shristi Infrastructure Development Corporation ($SHRISTI)	28.0%	27.2%	30.0%	30.0%	29.8%
Madhucon Projects ($MADHUCON)	11.6%	8.4%	31.9%	22.1%
Arss Infrastructure Projects ($ARSSINFRA)	21.8%	14.0%	13.9%	22.0%	31.3%
Median (29 companies)	12.4%	11.9%	11.2%	10.7%	10.7%
Spml Infra ($SPMLINFRA)	8.3%	13.1%	12.7%	9.9%	9.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Madhucon Projects ($MADHUCON)	149.8%	234.5%	155.1%	76.0%
Jaiprakash Associates ($JPASSOCIAT)	114.7%	97.0%	65.5%	45.0%
Supreme Infrastructure India ($SUPREMEINF)	16.7%	46.6%	31.1%	43.1%
Man Infraconstruction ($MANINFRA)	11.5%	7.8%	1.6%	25.0%	18.6%
Jmc Projects (India) ($JMCPROJECT)	7.8%	4.5%	1.7%	18.9%	3.2%
Median (23 companies)	6.1%	7.3%	6.6%	4.0%	3.1%
Spml Infra ($SPMLINFRA)	5.3%	9.2%	13.8%	13.1%	1.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Skipper ($SKIPPER)	10.6%	10.4%	13.5%	14.7%	27.4%
Mbl Infrastructures ($MBLINFRA)	24.3%	21.3%	13.4%	14.0%	13.6%
Voltas ($VOLTAS)	32.9%	19.6%	11.7%	11.8%	19.3%
Supreme Infrastructure India ($SUPREMEINF)	15.0%	15.4%	12.4%	10.6%
Reliance Industrial Infrastructure ($RIIL)	5.1%	10.8%	12.7%	10.5%	5.7%
Median (42 companies)	10.7%	8.6%	7.1%	5.6%	6.9%
Spml Infra ($SPMLINFRA)	6.7%	8.6%	9.7%	7.1%	10.6%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Coromandel Engineering Company ($COROENGG)	7.1x		14.4x	54.6x	3.2x
Welspun Projects ($WELPROJ)	71.3x	6.0x	2.6x	20.8x
Punj Lloyd ($PUNJLLOYD)	6.5x	6.7x	6.8x	16.5x
Madhucon Projects ($MADHUCON)	40.1x	96.8x	19.0x	16.4x
Hindustan Construction Co ($HCC)	10.0x	18.8x	20.3x	12.3x	9.3x
Median (32 companies)	3.7x	4.5x	5.7x	5.9x	3.0x
Spml Infra ($SPMLINFRA)	6.3x	5.1x	4.9x	7.3x	4.4x

Spml Infra stock price chart

Spml Infra financials

mln.	FY2010	FY2011	FY2012

Revenue	22,843	12,821	10,625
EBITDA	1,942	1,067	1,389
Net income	462.4	194.6	78.719
CAPEX	770.3	680.9	973.5
Debt	6,423	7,299	7,694
Cash	272.8	595.6	557.0

About Spml Infra

SPML Infra Limited operates as an infrastructure development company in India and internationally. It operates through Construction, Trading, Hydro Power Generation, Waste Management, Toll Road, and Others segments. The company provides engineering and infrastructure services, such as conceptualization, construction, management, operation, and maintenance services for water, power, environment, and infrastructure projects on engineering, procurement, and construction basis, as well as on build-own-operate-transfer/public-private partnership basis. It offers integrated water management and water sourcing solutions; undertakes power transmission and distribution, and rural electrification projects; constructs, operates, and maintains hydro/thermal power plants; and provides rural load management and integrated energy management solutions. The company also develops roads, bridges, flyovers, highways, industrial infrastructure, tunnels, special economic zones, industrial/business/technology parks, airports, seaports, bus terminals, automated car parking facilities, express roads/highways, terminal markets, and tourism and leisure facilities. In addition, it provides integrated end-to-end waste management solutions, including solid waste management solutions, such as collection, segregation, transportation, treatment, and disposal; waste water management solutions comprising collection, treatment, processing, scientific disposal, and reusability solutions; and sewer rehabilitation solutions. Further, the company manufactures pre-stressed concrete, mild steel and hume steel pipes, and RCC and PCC poles, as well as cement mortar lining of steel pipes and fittings; sells steel items and coal; and generates electricity from hydel projects. The company was formerly known as Subhash Projects and Marketing Limited and changed its name to SPML Infra Limited in April 2010. SPML Infra Limited was founded in 1981 and is headquartered in Gurgaon, India.